Walton Modems, Inc. makes modem cards that are used in notebook computers. The company completed the following transactions during 2017. All purchases and sales were made with cash.

Acquired $930,000 of cash from the owners.

Purchased $360,000 of manufacturing equipment. The equipment has a $48,000 salvage value and a four-year useful life.

The company started and completed 6,800 modems. Direct materials purchased and used amounted to $58 per unit.

Direct labor costs amounted to $43 per unit.

The cost of manufacturing supplies used amounted to $22 per unit.

The company paid $68,000 to rent the manufacturing facility.

Walton sold all 6,800 units at a cash price of $210 per unit.

The sales staff was paid a $15.0 per unit sales commission.

Paid $57,000 to purchase equipment for administrative offices. The equipment was expected to have a $4,800 salvage value and a three-year useful life.

Administrative expenses consisting of office rental and salaries amounted to $93,640.

Required

Use the following partially completed form to prepare an income statement using the contribution margin format.

Determine the break-even point in units and in dollars.

Assume that next years sales are budgeted to be the same as the current years sales. Determine the margin of safety expressed as a percentage.

Required A Required B Required C Use the following partially completed form to prepare an income statement using the contribution margin format. WALTON MODEMS, INC Income Statement For the Year Ended December 31, 2017 Sales revenue $ 1,428,000 Variable costs: Total variable costs Contribution margin 489,600 Fixed costs: Total fixed costs Net income $ 232,560